Cash $227,120 $211,270 Accounts receivable (net) 82,280 75,880 Inventories 232,250 224,660 Investments 0 87,040 Land 119,130...

Cash		$227,120	$211,270
Accounts receivable (net)		82,280	75,880
Inventories		232,250	224,660
Investments		0	87,040
Land		119,130	0
Equipment		256,260	198,630
Accumulated depreciation—equipment		(59,990)	(53,560)
	Total assets	$857,050	$743,920

Liabilities and Stockholders' Equity
Accounts payable		$155,130	$146,550
Accrued expenses payable		15,430	19,340
Dividends payable		8,570	6,700
Common stock, $10 par		46,280	36,450
Paid-in capital: Excess of issue price over par-common stock		173,980	101,170
Retained earnings		457,660	433,710
	Total liabilities and stockholders’ equity	$857,050	$743,920

Additional data obtained from an examination of the accounts in the ledger for 20Y9 are as follows:

Equipment and land were acquired for cash.
There were no disposals of equipment during the year.
The investments were sold for $78,340 cash.
The common stock was issued for cash.
There was a $58,910 credit to Retained Earnings for net income.
There was a $34,960 debit to Retained Earnings for cash dividends declared.

Required:

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

Merrick Equipment Co.
Statement of Cash Flows
For the Year Ended December 31, 20Y9
Cash flows from operating activities:
	$
Adjustments to reconcile net income to net cash flow from operating activities:


Changes in current operating assets and liabilities:




Net cash flow from operating activities		$
Cash flows from (used for) investing activities:
	$


Net cash flow used for investing activities
Cash flows from (used for) financing activities:


Net cash flow from financing activities
		$
Cash at the beginning of the year
Cash at the end of the year		$

Solutions

Expert Solution

A Cash flow statement provides the following information:

1) Information about company's cash receipt and cash payment during an accounting period.

2) Information about company's operating, investing and financing activities.

3) Information access the company's liquidity, solvency and financing flexibility.

Cash flow from operating activities (CFO), consists of the inflows and outflows of cash resulting from transactions that affect a firm's net income.

Cash flow from investing activities (CFI) consists of the inflow and outflows of cash resulting from the acquisition of long term assets and investment.

Cash Flow from financing activities (CFF) consists of the inflow and outflows of cash resulting from transactions affecting a firm's capital structure.

ekkarill92 answered 2 hours ago

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